I thought that there might be repercussions with Tx holding on to its rainy day fund while using the $12 billion in federal stimulus money to fill out the 2010-11 budget.... This is not good news.
Did lawmakers hurt state's shot at federal money for education?
Texas followed guidelines and is in the clear, legislator says.
By Kate Alexander
Friday, June 19, 2009
A $5 billion pot of federal grant money to reward states for education innovation might be out of reach for Texas because of how the state has used its share of the federal stimulus money so far.
During the recently completed legislative session, state lawmakers plugged a hole in the 2010-11 budget by using $12 billion in federal stimulus money. That allowed lawmakers to leave untouched the state's estimated $9.1 billion rainy day fund — saving the money has been a source of pride for state leaders.
But federal officials appear to see it differently.
In a Thursday letter to Pennsylvania Gov. Ed Rendell that could have ramifications for Texas, U.S. Education Secretary Arne Duncan criticized that state's lawmakers for using federal stimulus dollars to plug budget holes.
"If a state has done nothing more than backfill budget holes with these dollars when the state had other resources available to it, such as a rainy-day fund, the state's competitive position to receive (the new education grant money) may be negatively affected," Duncan wrote to Rendell.
Duncan said it was a "disservice to our children" for Pennsylvania to leave its rainy day fund intact while reducing education spending.
And there are similar concerns about Texas because the state did not touch its sizable reserve fund, which could have been used to create jobs and invest in education, said Sandra Abrevaya, deputy press secretary for the U.S. Department of Education.
Unlike Pennsylvania, Texas has not reduced education spending. In fact, the Legislature has approved a $1.9 billion increase in school financing for the 2010-11 budget — paid for by the stimulus money, said state Rep. Scott Hochberg, D-Houston.
Jerel Booker, associate commissioner of the Texas Education Agency, said he thought that Duncan's letter did not apply to Texas because the state increased its education financing. And Texas should be a leading contender to share in the $5 billion grant program for education innovation, called Race to the Top, because the state already has in place programs that dovetail with President Barack Obama's initiatives, Booker said. The program will reward states and school districts that adopt innovations that Obama supports.
State legislators said they repeatedly sought guidance from the federal government on how to use the stimulus money appropriately.
"Every effort was made to stay in compliance with the terms of the stimulus bill," said Hochberg, who led the House Appropriations subcommittee on education.
But some Democrats in the Legislature and the U.S. Congress have fumed, saying the $3.2 billion in education money from the federal stimulus should have gone directly to the school districts, instead of to bailing the state out of its budget jam. At the beginning of the session, officials estimated that the state was facing a shortfall of nearly $4 billion.
U.S. Rep. Lloyd Doggett, D-Austin, said the state created an "artificial shortfall" to justify using the money to cover the school financing and textbooks that it would have paid for anyway.
Doggett and other congressional Democrats have been pushing a budget amendment that would direct how Texas could spend its education stimulus money. Earlier this week, they failed to get the amendment on a war spending bill that cleared the U.S. House, but they say they will persist.
"Texas schoolchildren were shortchanged by getting only the same amount of monies for education that they would have received had no federal Education Stabilization funds ever been enacted by Congress," Doggett said.
Additional material from the Associated Press.